HC caps power duty for Himachal Pradesh industries at 16.5%

Shimla: The Himachal Pradesh high court has restrained the state govt from collecting electricity duty beyond 16.5% from medium and large industrial consumers, offering interim relief to industries across the state.The division bench comprising Justice Vivek Singh Thakur and Justice Ranjan Sharma passed the order while hearing a petition moved by M/s Verma Stone Crusher, located in Gajari village in Theog tehsil of Shimla district. The bench also issued notice to the power dept and the state electricity board for April 23.
The petitioner has challenged various notifications issued by the state govt enhancing electricity duty rates from time-to-time. According to the plea, the duty for medium and large industrial consumers was fixed at 11% with effect from July 20, 2017. However, it was later increased to 25% through a notification dated Sept 1, 2023, and further raised to 37.5% via a notification dated January 18, 2024.The petitioner's counsel argued that these steep hikes violate sub-section (2) of Section 11 of the Himachal Pradesh Electricity (Duty) Act, 2009. The provision allows the state govt to revise electricity duty rates through a notification but restricts any increase to not more than 50% of the rate previously specified under Section 3 of the Act at one time.Observing that the jump from 11% to 25% and subsequently to 37.5% prima facie appeared contrary to the statutory limit, the court directed that electricity duty beyond 16.5% should not be collected by the power dept and the state electricity board from medium and large industries.Additional advocate general Sushant Keprate, accepting notice on behalf of the state govt, apprised the court that the legal issue involved is similar to another batch of matters already scheduled for hearing on April 23. He said no separate reply is required to be filed, and the present petition could be decided based on material already submitted in the connected cases.